Mike Hudson, a biologist from Buckinghamshire who has been investing for more than 25 years, set up a Junior ISA for his 14-year-old son, Sebastian, to save for his birthday and Christmas.
“We started about six or seven years ago when we realised our son had more money than he could spend on sweets and Lego,” Mike explains. “From an investment perspective, it’s never too early to start.”
The only easy way for under-18s to access the investment market is for their parents to open a Stocks and Shares Junior ISA for them and allow them, or someone else, to put money into it.
You can put up to £9,000 into a Junior ISA per tax year, which can be split between both cash and shares accounts, and when your child turns 18 the ISA will be automatically rolled over into an adult ISA, without any tax or hassle.
There are hundreds of providers on the market offering Stocks and Shares Junior ISAs, and most of them allow you to choose your risk profile: some offer a ready-made portfolio, while others give you some control over the shares you want to invest in.
Sebastian is an investor with Hargreaves Lansdown and has a particular interest in science-related companies.
“He invests in innovation companies like Imperial. [College Innovations]It offers a long-term investment,” Mike says.
“And then at the other end of the spectrum, he has his money in the Brunner Investment Trust, which has been one of his best ongoing investments because it’s a fantastic portfolio across the biggest and strongest companies in the world and it’s very diversified.”
With the luxury of time on his hands, Sebastian can afford to invest in a variety of products and has long-term goals in mind.
“You want a down payment on a house and stuff like that, but in the short term it’s also interesting to see how the value changes over time,” the teen said. “It’s usually worth more than just leaving the money in a savings account.”
While he acknowledges that investing isn’t a regular topic of conversation among his friends, teens have more access to information about it than ever before through social media platforms like TikTok.
“Investing is a good way to build wealth for your family,” Ross adds, “but ultimately you want to give your kids financial freedom. You want them to do the job because they want to, not because it’s the highest paying job. That’s the most valuable thing.”
